SADOW: The 2023 Election Is Playing Out On The State Bond Commission

Intrigue, backtracking, if not hypocrisy all featured in the latest Louisiana State Bond Commission meeting driven by election year politics.

This special meeting was called to consider whether to institute a process that could ban financial institutions adhering to so-called environmental, social, and governance criteria in their investing and lending decisions from competing for state bond business. Both Republican Atty. Gen. Jeff Landry and GOP Treasurer John Schroder, two SBC members, have spoken out publicly about the inappropriateness of the state using these firms for a variety of reasons, including conflicts with state law, higher costs for taxpayers, and their discriminatory behavior towards lawful business sectors including some large contributors to the state’s economy.

It didn’t follow through. Landry, who had a representative at the meeting, had led the charge to disqualify such firms, but didn’t find any backing. Republican Sen. Pres. Page Cortez took the lead to shoot down the proposal, saying while his polling of legislators showed sympathy for the goals of the proposal, at the same time they also didn’t like the idea that this would restrict free enterprise in a fashion and might drive up costs.

However, that claim was inconsistent with recent legislator behavior. Only last year lawmakers approved Act 766 that prohibited the state contracting with People’s Republic of China companies for deemed critical infrastructure. Cortez voted for that, so obviously in certain cases legislators wouldn’t mind placing marketplace restrictions on state behavior, even if it meant higher costs.

Cortez did say legislators might well work to change policy as early as this session and stated the SBC should defer from policy-making. Schroder chimed in agreeing and said switching methods – as a means to prevent suitors from attesting to one thing and acting another way by pre-empting their participation through negotiated rather than competitive bidding – was too subjective to detect and would cost extra (which he said he avoided in past actions that attenuated vendor choice), so he wanted legislative direction for policy-making that might raise costs because of reduced or even no competition.

But this comes out more as a dodge than anything else, knowing that Cortez appears hostile to the idea plus Democrat Gov. John Bel Edwards would veto legislation like that and which Cortez appears unenthusiastic to whip up an override. Landry’s representative argued that policy statements from firms made it pretty obvious whether they acted discriminatorily, eliminating any real subjectivity.


Of course, discretionary policy could allow for exceptions in cases of little or no competition, so it’s not as black-and-white as Schroder suggests. But that would increase accountability on the SBC and especially could turn up political heat on Schroder by having him make those decisions whether to exclude.

And that’s the heart of the matter in an election season. With both he and Landry running for governor, Schroder does best politically by walking a tightrope by saying he’s anti-ESG yet finding ways not to act on it that Landry says he would do, allowing Schroder to appeal both to conservative voters against firms using ESG criteria and other voters who find that preference misplaced.

Trying to broaden his appeal has become particularly important since Landry appears to attract a large swath of conservatives and Schroder, despite a conservative history, has made apparently few inroads there, while leftist voters seem likely to flock to the incipient candidacy of Edwards’ outgoing cabinet member Shawn Wilson. Making moderate voters more comfortable with him than either of the other two, or with the other two quality candidates on the right Republican state Sen. Sharon Hewitt and GOP state Rep. Richard Nelson, may be crucial to his chances.

Expect this to become a campaign issue, with Landry loudly inveighing against SBC treatment of ESG issues, Wilson quietly saying ESG shouldn’t be an issue, and Schroder trying to split the baby.



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